Back in the Dark Ages (1980s)there Was an Active Secondary

question 17

Multiple Choice

Back in the dark ages (1980s) there was an active secondary market in airline tickets. Now, due to security concerns, passengers are required to show identification twice before boarding a plane. Once at check- in and once clearing security. Why didn't airlines oppose the extra costs of having to check identification?

• A)checking identification does not affect marginal costs
• B)airlines are as concerned about security as the government
• C)identification provides information for the airlines
• D)requiring identification prohibits arbitrage

Learn how to calculate the total purchased cost in an outsourcing decision model.

Understand the basic financial statements and their components.

Comprehend the concept of risk and return in investments.

Identify the calculation and interpretation of return on assets.

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Definitions:

Machine Hours

A measure of production or work performed, calculated as the number of hours a machine is operated.

Lease

A contractual agreement where one party (the lessor) allows another party (the lessee) to use an asset for a specified period in exchange for payment.

Average Total Cost

The total cost of production (fixed plus variable costs) divided by the quantity of output produced, representing the average cost per unit of output.

Marginal Cost

The amount spent on producing an incremental unit of a product or service.